OxyContin creator expands into Canadian pot industry

When Emblem Cannabis Corp was cleared by the federal government to sell medical marijuana in August, the company set out to attract new investors, vowing to “change the face” of the industry.

In company materials, Emblem touted the wealth of experience its top executives brought to the fold, particularly in its pharmaceutical division.

The man in charge of that business, John H. Stewart, was a veteran of the drug industry, having spent close to 40 years in key roles at one of the world’s biggest pharmaceutical companies.

His successes, Emblem said, included launching 11 new products, in particular one blockbuster drug that made his former employer billions of dollars – OxyContin.

Mr. Stewart was now bringing that expertise to Emblem, which planned on “revolutionizing” cannabis consumption with prescription tablets and capsules that “would dramatically expand Emblem’s sales.”

However, there were a few details Emblem glossed over in its promotional efforts.

A decade ago, when Mr. Stewart was president of Purdue Pharma Canada, coroners and public-health officials were beginning to ring alarm bells over abuse of OxyContin, a highly addictive painkiller.

When he later became chief executive officer and president of Purdue’s U.S. parent in 2007, it was only a month after the U.S. company agreed to pay the U.S. government more than $634-million (U.S.) to settle allegations that it “fraudulently misbranded OxyContin” as being less dangerous than it was.

OxyContin is now seen as the flashpoint of an opioid crisis that has swept across the continent, killing hundreds of thousands of people in Canada and the United States and touching off a chain reaction of addictions to other drugs, such as fentanyl.

Many of those killed after taking OxyContin were not initially addicts or abusers, but became dependent on opioids after being prescribed the drug by their doctor upon complaining of pain.

In 2013, law makers began asking new questions about what the company, based in Stamford, Conn., knew about the growing opioid crisis and how its own marketing tactics directed toward doctors may have fuelled the problem.

Wealthy from his days at Purdue, where he retired three years ago, Mr. Stewart has invested $1-million of his own money into his new company, one of 36 medical-marijuana producers licensed by the federal government. Emblem is now seeking to promote cannabis as an alternative to prescription painkillers – and profit from the opioid crisis Purdue was instrumental in creating.

Soon after receiving its licence from Health Canada, Emblem took to its Twitter account to extoll the virtues of cannabis over the prescription opioids that made Purdue one of the richest drug companies in the world.

“Medical cannabis,” Mr. Stewart’s new company said, “could save us from painkillers.”

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The opioid explosion began with a phone call.

Mr. Stewart joined Purdue as a sales representative in 1974, but was promoted to clinical research just two years later. By the early 1980s, he was put in charge of research and development at Purdue’s Canadian division.

Back then, Purdue wasn’t involved in analgesics, or pain-relief medications. The company’s British division had, however, developed a controlled-release technology for pills that allowed medication to last longer by dispersing the active ingredient slower. It called this invention Contin.

One day, a senior physician phoned the company and suggested its researchers marry Contin with morphine, since hospitals required a painkiller that lasted longer but traditional morphine only provided about four hours of relief.

“He said, ‘you’ve got this controlled-release system that you’re currently using for respiratory medicines and potassium. You ought to think about putting morphine in that,’” Mr. Stewart said in an interview in October.

“So we in Purdue Canada, and I was head of R&D at the time, started the process for saying ‘OK,’ let’s make a long-acting formulation of morphine.

“Myself and three other people are the ones that ran the program.”

MS Contin, as it was dubbed, hit the market in 1986 and, seeing the reception it got from hospitals, researchers at Purdue got to work on developing other kinds of long-lasting painkillers. Finding one that could be used on a broader spectrum of pain would be a gold mine.

Purdue’s U.S. division soon combined the opioid oxycodone with the company’s patented extended-release technology and OxyContin was born. The new product was approved by the U.S. Food and Drug Administration in 1995, and by Health Canada the following year.

“The U.S. developed it and we brought it to Canada,” Mr. Stewart said.

The pills sold well, with close to $50-million worth of OxyContin moving in its first year on the market in North America.

Opioids can be deceptive and dangerous drugs, though, since they are highly addictive. Oxycodone was created in 1916 by German scientists who were the first to synthesize opiates. The drug is chemically similar to heroin.

However, Purdue’s sales pitch to doctors was that OxyContin was less risky because of the proprietary slow-release formula. In an informational video distributed to doctors’ offices by Purdue sales representatives in the United States, the company claimed opioid analgesics had been shown to cause addiction in less than one per cent of patients, according to court documents obtained by The Globe and Mail. The video, titled From One Pain Patient to Another: Advice from Patients Who Have Found Relief, was to be used as an educational tool for clinic staff, and made available for patients to take home.

OxyContin use flourished, and by 2001, Purdue was selling more than $1-billion worth of the drug in North America. By 2002, that number climbed to more than $1.5-billion and the pills accounted for roughly 75 per cent of Purdue’s revenue. By every pharmaceutical-industry standard, OxyContin was a blockbuster drug.

A key driver of this growth was Purdue’s ability to persuade doctors that OxyContin could be used for more than just severe pain. When first introduced, the drug was mostly used to treat late-stage cancer patients and patients who had undergone major operations. But Purdue expanded its marketing efforts, promoting OxyContin for a wider range of ailments from arthritis and fibromyalgia to back pain.

Central to the company’s sales strategy was to get more doctors to prescribe the drug. This meant expanding its marketing beyond oncologists and surgeons, who had been the primary market, to a larger pool of doctors – including general practitioners – by persuading them that OxyContin was effective for less severe pain and useful for ongoing pain management.

In another educational video produced by the company, Purdue targeted doctors with the message that OxyContin was a drug “to start and stay with,” meaning that physicians should prescribe it for initial moderate and severe pain, and for extended treatment. Doctors, however, began to notice patients were developing a tolerance to the drug and, soon, a dependence.

By 2002, primary-care doctors in the United States represented nearly half of OxyContin’s prescribers as the drug was increasingly promoted to physicians “who were not adequately trained in pain management,” according to a report by the U.S. Government Accountability Office (GAO), a congressional watchdog that investigated the company’s marketing of the drug in 2003.

Meanwhile, documents show that Purdue doubled its sales force for OxyContin. In 1996, the company employed 318 sales representatives to promote the drug to doctors’ offices and hospitals and another 300 people contracted through a pharmaceutical sales company called Abbott Laboratories. By 2002, that total figure had climbed to 1,067, including 767 sales reps inside Purdue.

Each salesperson was given a list of 140 physicians to call on and was expected to make between 35 and 50 visits a week. To incentivize the sales force, Purdue expanded its bonus pool from $1-million in 1996 to $40-million by 2001. While an average sales representative made $55,000 in base salary, the bonuses for persuading doctors to prescribe OxyContin climbed as high as $240,000 a year per person.

Sales representatives were coached not to talk about OxyContin abuse unless a physician brought it up, according to a report by the medical-industry publication STAT, citing documents from a U.S. lawsuit settled in 2004 that were unsealed this year.

As the sales force ballooned, so did Purdue’s marketing budget. Purdue spent between six and 12 times more to market OxyContin pills to doctors than any of its other products, according to IMS Health, a company that tracks data for the health-care industry. Such spending included sending doctors to educational pain-management conferences at resorts in sunny locales such as Boca Raton, Fla. Purdue played host to 40 such events from 1996 to 2001, entertaining an average of 1,000 physicians a year, with travel, lodging and meal expenses paid by the company.

Spending on advertising also soared during that time, rising from $700,000 when the drug was introduced, to more than $4.5-million five years later, promoting OxyContin in medical journals, for example, as being suitable for all types of arthritis pain, though it had only been studied in patients with moderate to severe osteoarthritis. The company also plied doctors’ offices with food and gifts, ranging from doughnuts and lunches to stuffed toys and branded coffee mugs. It also gave them coupons for free subscriptions.

When the GAO investigated Purdue’s marketing tactics, including the instructional videos, it found the company was making “unsubstantiated claims regarding OxyContin’s effect on patients’ quality of life” and “minimized the risks associated with the drug.” The claim that opioid analgesics led to addiction in less than one per cent of patients, for example, could not be substantiated.

“Purdue conducted an extensive campaign to market and promote OxyContin that focused on encouraging physicians, including those in primary-care specialties, to prescribe the drug for non-cancer as well as cancer pain,” the GAO said.

As exposure to a highly addictive pain medication grew, so too did the dependence on the drug. While the company blamed this phenomenon on abusers, pointing the finger at addicts who had figured out that crushing the pills could deliver an instant opioid high, that was only one segment of the population.

Patients who had been prescribed the drug legitimately were also becoming addicts against their will. And since the body’s natural reaction to opioids is to develop a tolerance, a new phenomenon emerged with patients needing higher doses of the drug as time went on. Eventually, doctors were writing larger prescriptions for OxyContin, while some patients turned to illegal sources of opiates to feed the addiction.

As the death toll mounted from overdoses, lawsuits began to emerge. In the United States, Purdue was defiant, blaming the problem on addicts, illegal prescriptions and diversion, where legal drugs are channelled into the black market. OxyContin was fine, the company maintained, if used as directed. Purdue pointed to the good the drug did for cancer patients who needed it most.

Faced with a lawsuit in West Virginia in 2002, brought by a man whose wife died after taking OxyContin, Purdue was successful in having the case dismissed, arguing that she had not followed the warnings on the label.

“We have not settled one of these lawsuits – not one,” Purdue’s lawyer Howard Udell said at the time. “We have made a safe and effective product available for patients who need it according to the medical judgment of their doctors and we’re not going to compromise medical care by caving in to baseless litigation.”

He added, “Bad lawsuits can interfere with good medicine.”

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By 2003, OxyContin abuse was ravaging Canada as well.

Ontario, British Columbia and the Atlantic provinces were each reporting hundreds of deaths linked to the drug, and the number of prescriptions had skyrocketed in a few short years.

There were more than 640,000 prescriptions for OxyContin in Canada in 2003, a five-fold increase in just three years. In Newfoundland, where prescriptions rose 400 per cent during that time, the province set up a task force to look into the problem.

Purdue executives seemed just as confused by the addiction trend as anyone, suggesting that the crisis was one of illegal drug dealing, not patients becoming addicted to a prescription narcotic.

Mr. Stewart, who was now the president of Purdue Canada, offered money to probe drug dealing in Newfoundland.

“What we’re doing is sponsoring some individuals who are investigative types to try to get within the known abusers and individuals and try to track back through how they got the drug, where the person is who gave them the drug, and how it ultimately came from the legal into the illegal channel,” he told the St. John’s Telegram in 2004.

Soon, Canada’s chief coroners were raising alarms over the number of deadly overdoses taking place across the country.

Again, Mr. Stewart said the company was not to blame, and thoughts of curtailing the drug were inappropriate.

“The answer to abuse of prescription medications is greater education and substance-abuse treatment. The answer to diversion is tough law enforcement, not restrictions on patients and physicians who treat them,” Mr. Stewart said at the time.

Purdue, which was making billions of dollars from OxyContin, donated $100,000 to Toronto’s Mount Sinai hospital for drug-abuse programs. It also stressed the therapeutic benefit of the drug for patients who needed it most, and there were certainly many people who relied upon the drug to treat severe pain.

But when the Newfoundland task force issued its report in June, 2004, the findings were very similar to what had been uncovered in the United States: Physicians in the province were prescribing the opioid in an excessive manner, which indicated a number of serious problems, including improper use, diversion and illegal abuse, including patients shopping for prescriptions from multiple doctors to feed their habit or to sell the pills on the street.

The Newfoundland task force also noted Purdue had used “aggressive marketing of OxyContin” for the treatment of non-severe pain, which fuelled the overprescribing by doctors.

“There has been both a change in practice to support the use of narcotics for the treatment of non-malignant pain and an increase in public expectation to use medications for pain management,” the task force said.

Some physicians were less scrupulous than others. In 2002, 68 per cent of doctors in Newfoundland wrote an average of six scripts a month for narcotics, with OxyContin being the primary focus of the prescriptions. Two per cent of doctors wrote more than 156 prescriptions a month, and one per cent of doctors wrote 312 prescriptions a month.

In addition to singling out Purdue’s aggressive marketing of OxyContin, the task force also flagged a lack of monitoring of prescription-drug sales in Canada – particularly at the federal level – as part of the problem. “Health Canada’s role in monitoring and auditing sales of controlled substances and investigating adverse events needs strengthening,” the task force said.

As Canada contemplated how to confront the problem, the U.S. government launched an unprecedented lawsuit against Purdue for misleading doctors and the public about the highly addictive drug.

In the spring of 2007, Purdue settled the lawsuit for $634-million, and three of its top executives in Stamford – CEO Michael Friedman, Mr. Udell, the chief legal officer, and Dr. Paul Goldenheim, the former chief medical officer – pleaded guilty to fraudulently marketing the drug, “by claiming that OxyContin was less addictive, less subject to abuse, and less likely to cause withdrawal symptoms than other pain medications” despite lacking the medical research to support such claims.

In a statement, Purdue blamed the problems on “some employees” who “made, or told other employees to make, certain statements about OxyContin to some health-care professionals” that were inconsistent with the actual risks of the drug.

“We accept responsibility for those past misstatements and regret that they were made.”

U.S. law makers saw it differently.

“Purdue put its desire to sell OxyContin above the interests of the public,” Assistant Attorney General Peter Keisler said after the settlement was announced.

“Purdue’s illegal sales and marketing practices concealed information from patients and many health-care providers regarding the potency and abuse potential of OxyContin for corporate profit,” added Daniel Levinson, Inspector General for the U.S. Department of Health and Human Services.

A month after the massive settlement, Purdue named Mr. Stewart CEO.

In a news release announcing the move, the company said Mr. Friedman had retired.

As the incoming CEO, Mr. Stewart was supposed to be the person who would turn the page on Purdue’s problems.

But as the company looked to chart a new course, more problems were emerging in Canada.

Fuelled by the rise of OxyContin, the number of prescriptions written for opioids in Canada between 1991 and 2007 had metastasized, rising 850 per cent, compared to 300 per cent in the United States during the same period.

A 2009 study in the Canadian Medical Association Journal cited a correlation between a sharp increase in overdose deaths in Ontario and the introduction of long-acting oxycodone to the province.

“The addition of long-acting oxycodone to the provincial drug formulary was associated with a five-fold increase in deaths related to oxycodone use, as well as an increase in overall opioid-related mortality,” the CMA said. The study also said Purdue’s marketing campaign may have led to the drug being prescribed liberally.

Purdue’s fix for the problem was to reformulate OxyContin, to make it more difficult to tamper with in order to combat users who were intentionally abusing the drug. By changing the physical and chemical properties of the pills, the company hoped to prevent people from being able to crush, chew or dissolve the pills in order to get an immediate oxycodone high.

Purdue had long maintained that people who were altering the drug this way were the primary abusers of the drug, not patients who had inadvertently become addicted through their prescription, though U.S. lawmakers disagreed.

At an FDA meeting in September, 2009, the reformulated OxyContin pill, dubbed OxyNEO, was approved, though the company warned the room that it didn’t have the technology to make the drug completely tamper proof.

But Purdue’s marketing still raised eyebrows. That same year, under Mr. Stewart’s watch, the company launched a website called Partners Against Pain, and hired country-music star Naomi Judd as its spokeswoman and patient advocate.

“Pain robs people of their lives. It can interfere with everyday activities that most of us take for granted, like going to work, driving a car, or even hugging your children,” Ms. Judd said. “That’s why I’m speaking out – pain can and should be treated.”

In an effort to repair Purdue’s image, Mr. Stewart said the company would work with the health-care sector, law enforcement and local communities to battle opioid addiction.

“The best chance for making a significant impact on the abuse of prescription drugs is greater collaboration among the many sectors of our society that recognize the serious public health problem that this abuse represents,” he said at the time.

This new era of openness and collaboration has since been called into question.

In May, 2012, the U.S. Senate Committee on Finance sent Mr. Stewart a letter informing him that more people in the country were dying from drugs than car accidents, and that prescription painkillers were costing health insurers $72.5-billion a year in added costs.

“It is clear that the United States is suffering from an epidemic of accidental deaths and addiction resulting from the increased sale and use of powerful narcotic painkillers,” said the letter, signed by 24 senators.

“There is growing evidence pharmaceutical companies that manufacture and market opioids may be responsible, at least in part, for this epidemic by promoting misleading information about the drugs’ safety and effectiveness.”

The letter called into question organizations and websites like the American Pain Foundation, which purported to be a health-advocacy agency, but received its funding from companies like Purdue, and published guides for patients, media and government that played down the risks of opioids.

With the drug being prescribed for a wide array of conditions, the Senate committee asked Purdue to produce records of its payments to several non-profit health-care organizations.

But getting the company to co-operate with such requests was not easy.

In June, 2013, at a conference on drug dependency held in San Diego, Purdue epidemiologist Howard Chilcoat told the audience that the company kept a database of doctors it suspected were prescribing OxyContin for improper reasons.

When Nevada Senator Tick Segerblom learned of the revelation, he immediately sent a letter to Mr. Stewart, asking for the company to send the state any information it had on such doctors so that the government could clamp down.

Mr. Segerblom had been trying for years to stem the growing tide of opioid overdoses in his state, and such information would be highly valuable, he figured.

“I have been concerned for some time about the mounting death toll related to certain addictive drugs, such as OxyContin,” Mr. Segerblom wrote in an August, 2013, letter to Mr. Stewart, which was obtained by The Globe.

“If Purdue Pharma is willing to sell a highly potent, highly addictive narcotic, then I believe the company has an ethical if not a legal duty to inform authorities in each state of doctors who appear to be irresponsible in prescribing OxyContin.”

Mr. Stewart wasted no time, sending a response letter the next day.

“I am writing to confirm that Purdue is willing to meet with officials with the Board of Medical Examiners at their earliest convenience to share detailed information about the source of the information and data that we analyzed, our analytical processes, findings and subsequent actions,” he said in a letter also obtained by The Globe.

Mr. Segerblom eagerly waited for the information to be provided. But when the time came, he was shocked by what Purdue handed over.

“What they provided to us was basically just newspaper clippings,” Mr. Segerblom said in an interview. “If there was a doctor being accused of overprescribing and there was a newspaper article or something, they had that in their file. That’s what they gave us – which is meaningless.”

“We thought there was going to be some super-secret list of doctors who they internally had seen were prescribing way more than normal doctors. They basically just gave us public information – doctors who had been brought up on charges before the medical board. It was pretty worthless. They just reiterated back to us what we as a state already knew.”

With Purdue not producing what was expected, the company was again drawing the ire of the U.S. government.

Mr. Stewart left the company four months later.

In August, Purdue faced new criticism that it was refusing to turn over documents to U.S. law makers, and government officials in California called for a congressional investigation into the company and the opioid industry.

As that was happening, Mr. Stewart was unveiled as the new head of the Paris, Ont.-based Emblem Pharmaceutical, the newest entrant in Canada’s medical cannabis market.

He still lives in Stamford, travels regularly to Canada for his new role and is reluctant to talk in detail about his past.

“I know that Purdue U.S. and Purdue Canada subsequently kind of get vilified in the press … because of the OxyContin problem, and fair enough, I can see the perspective,” Mr. Stewart told The Globe.

“But that’s Purdue and I shouldn’t speak too much for Purdue any more because I’m not part of them any more.”

In a subsequent interview this week, Mr. Stewart sought to change the subject.

“I have lived this for quite some time, and I would be happy to stop living it,” he said.

“OxyContin may be the poster child, but it’s not the only opioid with the potential to be abused or to, in fact, be abused and cause serious problems.”

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Mr. Stewart is now hoping to take part in the development of another blockbuster pill.

Inside the medical marijuana sector, a race has begun to develop cannabis pills that are consistent and potent enough that they can be prescribed to treat certain conditions.

The ultimate prize is to have those pills accepted by prescription health plans – a highly coveted payday for the industry.

“Recognizing that there is a lot of meaningful data out there that this works for certain patients and in certain indications, [there is] a way that health-insurance companies could accept that.”

At an invitation-only presentation to investors at the Trump Hotel in Toronto this week, Mr. Stewart touted his Purdue résumé to a room full of bankers, and laid out his plan for marijuana pills and capsules.

“Where we’re going to be going with this is to take our select strains of marijuana and develop what I call advanced dosage forms,” Mr. Stewart told them. “You can’t patent a molecule. [But] you can do things with dosage forms.”

Cannabis will never replace more powerful painkillers, like opioids, for severe forms of pain, since its effect on the body isn’t strong enough. But some researchers believe it could eliminate some of the needless prescribing of opioids – for lesser pain – that has occurred over the past 20 years, beginning with the heavy marketing of OxyContin and the subsequent addiction problems that arose.

Emblem now wants to make money off that.

“You do have people who exhibit the behaviours of addiction with marijuana,” Mr. Stewart said. “[But] I do think the severity of misuse of cannabinoids is certainly less so than with opioids. So, in a sense, they are safer.”

Asked if he learned any lessons from his days in the opioid business, he said: “many.”

“A few things that if you had your time back, you wouldn’t do again – like, let’s not send people, for heaven’s sake, to Hawaii if they’re a bunch of Canadian doctors to put them in a room for two days,” Mr. Stewart said.

“It became the story – as opposed to the quality of the educational experience.”

He also said he has learned people are skeptical of drug companies.

“If a pharmaceutical company is behind it, there must be something inherently wrong with it,” Mr. Stewart said.

“But the big lessons I bring [to Emblem] are how to do pharmaceutical-type drug development correctly.”

Two decades after it debuted, Purdue has sold more than $30-billion worth of OxyContin, and the death toll from the drug is still being tallied. The company’s website now includes a video that says it “is learning from the past, while focusing on the future.”

Mr. Segerblom shakes his head.

“How they brought that drug out, and then told people don’t worry about it, it’s not addictive,” Mr. Segerblom said.

“It’s just unbelievable really, the amount of damage they have caused people.”